Obama administration delays decision on Keystone XL pipeline

Rep. Lee Terry (R-Neb.) calls for approval of the Keystone XL pipeline at a news conference in March on Capitol Hill. (Jim Watson / AFP/Getty Images)

WASHINGTON -- The Obama administration has delayed a decision on the controversial Keystone XL pipeline project, perhaps until after November’s midterm election.

A further delay in the evaluation of the pipeline, which already has lasted more than five years, is necessary because of a Nebraska state court decision in February that invalidated part of the project’s route, the State Department said in a statement.

Shortly after the court ruling, administration officials had said the Nebraska case would not have an impact on their deliberations. But in the new statement, the State Department said federal agencies could not evaluate the pipeline's impact until the "uncertainty created by the ongoing litigation" is resolved.

That could take awhile. Nebraska officials have appealed the case to the state Supreme Court but have said they do not expect a ruling until late this year at the earliest.

In the meantime, the latest delay could get President Obama off a politically difficult hook in an election year. The White House has been pressed on one side by environmentalists who have turned opposition to the pipeline into a major cause and on the other by conservative Democrats from energy-producing states who support it.

Administration officials have differed on both the substance and the politics of a decision on Keystone, which would carry oil from the tar sands deposits underneath Canada's western prairies to refineries in Texas and Oklahoma.

Opponents say the project would worsen global warming by opening up the tar sands to development. Supporters say it would reduce U.S. dependence on oil from the Middle East, Africa and other unstable parts of the world and that Canada will develop the tar sands whether the U.S. approves a pipeline or not.

Obama has said he would approve the project only if it could be proven not to worsen emissions of greenhouse gases that lead to global warming. His approval is needed because the pipeline crosses an international border.

Politically, Obama’s advisors have disagreed about the impact on a difficult election season in which Democrats face a strong prospect of losing control of the Senate.

Some advisors believe that a decision to kill the pipeline could boost enthusiasm among Democratic activists, which has been lagging. Others argue that since most of the key Senate races are taking place in red states, such as Louisiana, Alaska and Arkansas, a decision against the project could hurt Democratic prospects.

Those political calculations were on display as lawmakers and others reacted to the administration's decision.

Sen. Mary Landrieu (D-La.), who has campaigned for reelection by stressing her independence from Obama, lambasted the delay as “irresponsible, unnecessary and unacceptable” and vowed to use her position as head of the Senate Energy Committee to win approval for the pipeline.

"Today's decision by the administration amounts to nothing short of an indefinite delay of the Keystone pipeline," she said, warning that it sends "a signal that the small minority who oppose the pipeline can tie up the process in court forever."

"It hurts all of us when no decisions are made," she said in a statement.

Republicans and the oil industry quickly denounced the decision.

“At a time of high unemployment in the Obama economy, it’s a shame,” said Senate Republican leader Mitch McConnell of Kentucky.

“It’s a sad day for America’s workers when politics trumps job-creating policy at the White House,” American Petroleum Institute President Jack Gerard said in a statement.

Russ Girling, chief executive of TransCanada, which is proposing to build the pipeline, said in a statement that the company was “extremely disappointed and frustrated with yet another delay.”

Environmental groups were thrilled. The League of Conservation Voters hailed the delay as "great news" that "makes us even more confident that the harmful Keystone XL tar sands pipeline will ultimately be rejected."